Editor Andrew Arnott
Andrew studied Literature and Sociology at UCT before setting off on a global trek that saw him working under the seas of the Caribbean, on the snow covered slopes of the Canadian Rockies and writing for a variety of financial and travel institutions. Now at home in Cape Town, Andrew’s passions for wine and writing are married on this blog.
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Time for Reflection Posted on May 25 2015 by
When the first real rains soak the soil and the days close in around us, it’s the season for reflection. In this case I am reflecting on the last seven years – always an auspicious chunk of time.
In late 2007 I announced I was selling Flagstone to a company called Constellation. With its head office in Rochester, New York, Constellation was the world’s largest wine company. Publically listed and a member of The Fortune 500, it was a truly massive multi-national business with substantial investments across the globe.
Flagstone was miniscule in comparison, but we punched above our weight in terms of accolades, column inches and profitability. We were an irreverent entity in many ways, choosing the non-conformist path whenever conformity seemed silly – which was most of the time.
The reaction to the sale announcement from wine journalists was mostly disparaging. I expected that, and chose not to comment, hoping my actions would speak louder than any response could. On reflection, the question I wrestle with is: have my actions achieved enough to prove the doubters wrong?
My motivation for doing the deal was to get my hands on a brand called Kumala, which Constellation owned. Started by a talented Englishman, Roger Gabb, in the early 1990s it had grown to be South Africa’s largest export brand.
By 2007, however, the brand was looking a bit tattered. Much of the wine was insipid, a bit characterless and sometimes inconsistent in style. Bottled under synthetic cork, it had no staying power, and sometimes started oxidising on shelf. There was no connection to the land. In fact the wine was bought as a finished product from a 3rd party broker, who was also a major competitor. Crucially, volumes were slipping.
But I just saw massive potential to use Kumala as a lever for social change on a large scale. Despite the gradual deterioration of quality, Kumala was still a proper wine brand that owned real estate in the mind of the consumer. It said “Welcome to South Africa”, and this is like gold in the wine industry. It meant the brand had a following and momentum. This in turn meant we were a big player in the South African wine industry, buying many millions of litres of wine from the big co-ops and wineries around the Western Cape.
My first challenge was the quality of the wines. QC (Quality Control) was a mess. Our procedures were haphazard and flawed. But once I had a little buy-in from the incumbent wineteam, we started fixing what was broken.
We did this while simultaneously shipping the equivalent of 480 000 bottles of wine a week. It was an exhilarating time. I hired a wonderfully tenacious and talented QC Manager, Celeste Truter, and together we re-engineered the entire winemaking process.
Fortunately, our company is blessed with a similarly tenacious and talented logistics manager, Leone Meuwesen, who supported the painful overhaul, despite the frustrations and shipping delays this initially caused.
We completely changed the wine style, aiming for freshness. We strived for authenticity and consistency. Above all we championed “drinkability” – the sweet spot between softness and tautness all balanced wines display.
Today Kumala is winning awards around the world. The wines outlive most of their competition, both from South Africa and globally, and they are fun and satisfying to drink. Consumers recognise the value they offer and this has helped grow the brand in volume every year for the past six years. Kumala is now bigger than the huge Australian brand Jacobs Creek in the UK, and we are once again the biggest South African export brand. From this perspective, it has been a success story.
But Kumala was less successful as a lever for social change. We wanted to use Kumala to make a direct difference to the most marginalised in the agricultural sector – the farm workers. Our initial goal was to only buy wine for Kumala that was ethically audited, thereby encouraging farmers to put ethical standards and audits in place.
We hung our hat on WIETA’s guidelines (The Wine Industry Ethical Trust). Unfortunately, timing went against us.
Just as we started our process, the financial crisis of 2008 threw Constellation into a tailspin and suddenly short-term crisis management pushed our pet project into the background. There simply wasn’t any extra cash to facilitate social change in the way we had envisioned. The business was solely focused on its own survival.
We still managed to achieve a great deal however. We financially supported WIETA through its darkest days when conflicting agendas within the body threatened to tear it apart and the farmers were understandably losing trust in the organisation.
We initiated an annual Growers Day Conference where, over and above technical issues, we hammered home our message about ethical standards and how important such accreditation is to our buying decisions, and the collective future of our industry. The response was very positive, with most of our supplying wineries committed to social reform at farm level.
The number of farms that have been audited and accredited by WIETA have steadily increased over the years, and we’d like to think we played a small role in that. WIETA now numbers over 1000 producing members, many already audited and many more in the process.
For the last six years, every drop of wine we use for Kumala is IPW (Integrated Production of Wine) accredited, which is the global benchmark for sustainably grown and made wine.
We continue to encourage and, where we can, insist on buying ethically audited wine believing that this, along with initiatives such as Fairtrade, are making the world a better place for farm workers in South Africa. As of 2015 our Fish Hoek brand will be 100% Fairtrade accredited.
Bubbling away in the background are our extraordinary school building projects in Khayamandi, the semi-formal township just outside Stellenbosch. Constellation and now Accolade (current owners of Kumala and Flagstone) have pumped more than R5 million into two preparatory schools in the area.
Flagstone is similarly experiencing exciting growth. The wines have never looked so good, thanks to Gerhard Swart’s exemplary winemaking talents. The range has steadily increased, as has distribution. In volume of the brand is about 300% bigger than when I sold it. I doubt I could have achieved that on my own. In particular, our partnership with on-trade distributor Matthew Clark in the UK has been a very satisfying journey. We have contributed over R250 000 last year to cheetah preservation through the sales of our Flagstone Cheetah Reserve wine. Flagstone is naturally an audited and certified member of WIETA.
It is a perfect time to expand the range and we will soon be releasing a new barrel-fermented Chenin Blanc and Chardonnay. Watch this website for more details – the wines are truly impressive –finely balanced, mouth-watering and exquisitely crafted.
So have I achieved enough to prove the doubters wrong? Yes and no would be an honest answer.
Thanks to a good team and global distribution, Flagstone is a growing, powerful premium brand. Kumala is a powerhouse lifestyle brand. But I am disappointed with our inability to facilitate social change at a faster pace with the buying power we enjoy.
Autumn is indeed a chance for reflection, but there is still enough sunshine to balance the impending melancholy of winter. This means we can still dream and plan.
Because Kumala is a stronger brand than it has ever been, it has more leverage to make a social difference than ever before. This is exciting.
The vines on my own farm have matured, balanced out and settled down. The wines they are producing are remarkably different from anything else in South Africa and hugely rewarding to make.
So now for the next seven years! Stick around. It’s going to be a lot of fun.
Love, light and a glass or two of honest, delicious wine – whatever the price!